Despite efforts by the state’s Department of Insurance (DOI) to revise
the rate making policies in California, on March 20, State Farm
announced it would not be renewing more than 70,000 commercial,
residential and rental insurance policies in California. And the
announcement emphasized that these actions were only being taken in
California.

Less than a year ago, State Farm announced it would not be writing any
new policies in California. At least seven other insurance carriers,
including Allstate and Farmers Insurance, announced similar intentions.

State Farm tried to explain its reasons in the statement, “This decision
was not made lightly and only after careful analysis of State Farm
General’s financial health, which continues to be impacted by inflation,
catastrophe exposure, reinsurance costs, and the limitations of working
within decades-old insurance regulations … It is necessary to take these
actions now.”

Although the company acknowledged the actions the DOI has taken in the
past several months and its future intentions, State Farm nevertheless
felt compelled to reduce its coverage in California.

In 2023, the Insurance Information Institute highlighted the industry’s
problems with the wildfire insurance situation in California.
“California’s difficulties are not just due to the types of perils the
state faces. Proposition 103, a three-decades-old legal measure,
constrains insurers’ ability to accurately underwrite and price these
risks. Insurers must be able to set premium rates prospectively, and
Proposition 103 bars them from doing so. Instead, it requires them to
price coverage based on historical data alone. It also prohibits them
from including reinsurance costs into their pricing …”

The threat of a catastrophic wildfire has grown. Dry winters, along with
hotter summers, exacerbate this threat. In California, insurance
companies must base their rates on historic losses, not potential
threats nor increasing costs to rebuild the structural losses.

While the Legislature was unable to agree upon any insurance reform
legislation before it adjourned in Sept. 2023, Gov. Gavin Newsom
encouraged Insurance Commissioner Richard Lara to begin making
administrative changes to encourage insurance companies to remain in
California and begin to expand their underwriting.

On Sept. 21, 2023, Newsom issued an executive order requesting that the
insurance commissioner “… take prompt regulatory action to strengthen
and stabilize California's marketplace for homeowners’ insurance and
commercial property insurance …”

And he specified five goals, the first of which was to expand the fire
insurance choices for homeowners, especially in vulnerable areas. Among
the other four, Newsom wanted to improve DOI’s rate approval process
and, importantly, maintain the solvency of the FAIR Plan.

In September, Lara announced his Sustainable Insurance Strategy. Among
the problems the plan was to address were the changing climate
conditions, inflation, the 30-year-old regulatory process and the FAIR
Plan.

Lara hoped to achieve greater policy availability, reduce the number of
homeowners relying on FAIR, and increase coverage in wildfire-threatened
areas.

In the six months since then, Lara has made modifications in the FAIR
Plan and proposed new regulations for streamlining and clarifying the
rate-making process and allowing future rate requests to be based on
modeling forecasts of calamities as well as cost increases rather than
just relying on historical data.

One of Lara’s first changes, which the state courts approved in
November, affected the coverage of FAIR Plan policies. The California
FAIR Plan is an insurer of last resort. It is required to accept any
property regardless of its wildfire exposure. It is neither a state
agency nor funded by any state or public taxes. Its funding primarily
comes from the policies it sells to customers.

In 2023, the FAIR Plan had 350,000 policies in force, an increase of
23%, Victoria Roach, president of California’s FAIR Plan, told the
Assembly’s Insurance Committee. It is now receiving 1,000 requests for
new policies daily.

“The FAIR Plan covers a significantly higher concentration of high
fire-risk properties than voluntary insurers. Its total risk exposure
was over $311 billion as of December 2023 compared to $50 billion in
2018,” Roach added.

In Southern California, its largest exposures are near Lake Arrowhead
and Big Bear.

The proposed change required broader coverage for FAIR Plan policy
holders, rather than the “bare bones” of only fire and smoke damage.
This limitation required policy owners to seek added insurance for
possible liability or water damage.

A Los Angeles Superior Court Judge upheld Lara’s authority to order more
coverages, including accidental discharge or overflow of water or steam;
premises liability; incidental workers’ compensation; theft; falling
objects; weight of ice, snow or sleet; freezing; and loss of use,
including coverage for added living expenses and fair rental value.
These are typically included in a standard comprehensive homeowners’
policy, but not offered under the FAIR Plan’s limited fire policy.

The bigger issue of changing the rate-setting process was not being
delayed. Lara issued new regulations for the rate-making process in
February. A month later, he issued draft regulations to incorporate
using catastrophe modeling into consideration of rate levels.

On Feb. 9, the DOI published draft regulations intended to modernize the
submission requirements for auto, home, business, and other property and
casualty insurance for new rate request applications. The DOI noted that
the current regulations were “created in an age of pagers and
payphones.”

“My proposed regulations represent a crucial step towards fostering a
fair, transparent, and efficient rate approval process,” stated Lara in
the accompanying news release. “By updating submission procedures and
clarifying requirements for insurance companies, we aim to eliminate
confusion, reduce delays, and enhance public participation in the
rate-making process. This will help our Department’s experts make sure
that no policyholder is paying more than is required.”

These changes are intended to clarify future submission documents,
eliminate debate about incomplete applications, and specify the
necessary data to evaluate a rate change.

Five weeks later, Lara released a regulation allowing and specifying the
use of catastrophe modeling for wildfire, terrorism and flood lines. DOI
already permits using this modeling for earthquake losses and fire
following an earthquake. Current rate provisions are based on historical
data. This does not permit the companies to use models that can help
predict wildfires and where they may occur.

“Under outdated rules, the growth of climate-driven mega fires has
supercharged insurance costs for many Californians while making
insurance harder to find,” Lara said in the news release about
catastrophe modeling. “We can no longer look solely to the past as a
guide to the future. My strategy will help modernize our marketplace …”

The goals of this second set of regulatory revisions are more reliable
rates and greater availability of insurance policies.

However, Consumer Watchdog is concerned with how this new rule will be
implemented and the public’s ability to review the data and model.

“Black box catastrophe models are notoriously contradictory and
unreliable, which is why public review and transparency are key before
insurance companies are allowed to use them to raise rates,” Consumer
Watchdog stated in its news release. “Commissioner Lara’s proposed rule
appears drafted to limit the information available to the public about
the impact of models on rates in violation of Proposition 103. 

“The rule fails to spell out whether or how the Department of Insurance
would assess a model’s bias, accuracy, or the validity of the science,
instead creating a pre-review process that appears primarily focused on
determining what information companies must disclose and what they may
conceal from public view.”

Besides modeling how climate changes may be affecting the frequency and
occurrence of wildfires, this set of regulations also incorporates the
actions of homeowners and communities to mitigate the threat of
wildfires in or near their communities. This is consistent with the
DOI’s requirement for “wildfire safety discounts” as the result of
mitigation projects.

Amy Bach of United Policyholders recognizes the discouraging state of
California’s wildfire insurance market. But she expressed optimism that
it will improve.

However, she did advise homeowners who received a nonrenewal notice to
begin shopping for another policy. “Dig for policies, be patient.
Insurers are still in the CA market but with strict limits and quotas on
how many policies they’ll sell in given areas.”

In February, before the announcement of plans to curtail some coverage
in California, State Farm announced its 2023 financial results. For the
property and casualty piece of the firm, last year was worse than 2022.

“The State Farm P-C group of companies reported earned premium of $87.6
billion and a combined underwriting loss of $14.1 billion. This result
compared to an underwriting loss of $13.2 billion on earned premium of
$74.3 billion in 2022. The change over 2022 reflects improvement in auto
lines underwriting results which was offset by the significant increase
in homeowners incurred catastrophe claims,” as reported in the company’s
financial news release.

State Farms’ nonrenewals of some policies will occur on a rolling basis
over the rest of this year, beginning July 3, for homeowners, rental
dwellings, residential community associations and business owners. On
Aug. 20, commercial apartment policies will cease to be renewed.
Combined, these policies represent just over 2% of State Farm General’s
policy count in California.

While the first three months of 2024 have not been as wet as in 2023,
precipitation has covered the Hill. This past weekend was a combination
of snow, between 8 and 10 inches, and another inch of rain.

No precipitation records were set during the weekend, but one weather
record did occur. The National Weather Service (NWS) reported that the
low temperature in Idyllwild Saturday, March 30, was 40 degrees. The
previous low for this date was 43 degrees, which occurred nearly 50
years ago in 1977.

Currently, the NWS has another storm forecast for next weekend.
Precipitation could start as early as Thursday evening and continue into
Saturday. While the volume is likely to be less than what fell this past
weekend, temperatures are more likely to be colder and snow levels as
low as 3,500 feet, the NWS reported Monday, April 1.

Rainfall totals remain below the average for a rain-year (from Oct. 1
through Sept. 30). They have been steadily climbing during the last half
of March. Idyllwild and Pine Cove Dutch Flats recorded nearly 3.5 inches
in March and Keenwild Ranger Station recorded about 5.7 inches of rain.

For the past 20 years, the average annual rainfall at Idyllwild Fire
Station has been about 22.7 inches. During 2024, the precipitation total
was nearly 40 inches.

Since Oct. 1, 2023, slightly more than 12.25 inches have been recorded
at the fire station, which is about 54% of the average annual rain. At
both Keenwild and in Dutch Flats, more than 19 inches have been
recorded, or nearly 85%, of the annual total.

In 2023, only 5 inches of precipitation were recorded from April through
September, and nearly 3.6 inches came as Tropical Strom Hillary passed
over the Hill in August.

In its March El Niño report, the Climate Prediction Center forecast
these weather conditions to begin transitioning during the spring to
neutral conditions. La Niña conditions are likely to emerge during early
to midsummer. The NWS prediction set the odds of this occurring at 62%.

And Climate Science at University of California, Los Angeles’ Dr. Daniel
Swain’s midterm forecast is consistent with the NWS prediction: “There
may be one additional (though weaker) system that could bring some
additional showers, isolated thunderstorms, and Sierra snowfall later
next week. But after that, there are some signs of a quieter and warmer
pattern developing that could persist until at least mid-April. Right
now, seasonal models are suggesting relatively high odds that California
will warm up rather fast starting in May and June this year,” he wrote
on Weather West, Wednesday, March 27.

Looking at the NWS forecast maps, April showers are still expected, but
the May through July period will be warmer and drier.

Commissioners at the March 23 meeting of the Idyllwild Fire Protection
District (IFPD) had a lot to digest. The chief’s report included several
big documents: the draft fiscal year (FY) 2024-25 budget, the draft of
the 2025-30 Capital Improvement Plan (CIP), the district’s new Vehicle
and Equipment Catalog (VEC), the draft 2025 update of the district’s
Strategic Plan, and a summary report of this year’s Insurance Services
Office Public Protection Classification, or ISO rating.

The FY 2024-25 draft budget is 6.5% higher than 2023-24, similar to the
increases over the last five years. The last budget was $3,345,000, and
the draft calls for $3,563,300 next year, with revenues keeping pace.

The CIP is the plan for equipment acquisitions and includes estimates of
where each piece of equipment, especially vehicles, is in its expected
lifespan, and how much it would cost to replace. Chief Mark LaMost
thanked the board for its support for past purchases: The two ambulances
the district purchased in 2020 and 2021 would cost at least twice as
much now. 

LaMont, and the commissioners, expressed satisfaction with the recently
purchased, low-mileage, used ambulance that arrived. It was purchased
for $60,000 after logging only 31,000 miles at an Air Force base. A new
unit would cost $219,000 and take at least a year to deliver.

Another purchase fell through this month: LaMont has been looking for an
administrative vehicle for Executive Assistant Rachel Teeguarden, who
logs a lot of miles for the district on her personal vehicle. This
purchase was already budgeted and is a $43,000 line item in the new
draft budget. An offer came in for a new 2023 Dodge Durango for $23,230,
an interdealer trade, but another buyer got there first, so the search
continues. LaMont is seeking something large enough to do crew swaps
during extended incidents, but small enough to get good mileage, and is
focusing on either a Durango or a Jeep Cherokee.

The ISO audit is the way a fire agency’s strength or weakness is rated,
and the information has historically been used by insurance companies to
determine risk. On a scale of 0 to 100, over 90 points earns an agency a
“1,” above 80 a “2”, etc. IFPD rose from 80.03 to 89.33 with this audit
and is now less than a point below that top rating.

LaMont said only two other agencies in the county have 2 ratings:
Riverside City and Corona, and that Cathedral City lost its 2 rating
this year. IFPD will ask for an interim audit in 18 months and try for
that last fraction of a point to raise the district’s rating to a 1.
LaMont told the Crier he is not aware of any agencies in the county with
that rating.

LaMont tied the CIP into the ISO rating: Gaining and losing equipment
gives a fire department more or fewer points. In LaMont’s example, if
the district lost its ladder truck it would lose 5 points. A ladder
truck would cost $1.5 million to replace. It cost a about a third that
in 2003. He said he has only seen it used three times in his time at the
district, but it saved houses on those calls.

The documents used for the audit fill a 4-inch-thick binder. Much of
that is from Fern Valley Water: 7 points are available for water, and it
is hoped that with Idyllwild Water District’s (IWD) cooperation, this
goal can be reached. Hydrant maintenance is one thing that helps, and
IWD’s interim general manager has begun fixing them. IFPD receives no
direct benefit for the better ISO rating, but it is a benefit for
homeowners, and indicates a higher level of preparedness, and a better
resourced agency.

The Crier contacted Bill Severns, a broker who has sold a great deal of
insurance to Idyllwild homeowners, to ask whether this change would
affect local insurance premiums. He pointed out that while standard
carriers consider ISO ratings for their fire ratings on properties, the
California FAIR Plan does not, but instead uses its new Zesty AI system.
Severns said, “All standard carriers are not writing in the brush areas,
so I have no idea what the differential in premium would be for an ISO 1
vs 2.” The higher rating, he concluded was, “Great news for Idyllwild
people, but really not applicable to the Idyllwild insurance industry at
this point.”

During a recent trip to California Training and Education Expo at the
Riverside Convention Center, IFPD met many vendors who confirmed what
they already knew: Replacement costs for vehicles and other equipment
are “off the charts.” Looking at the service life of the present fleet,
the CIP foresees a steady increase in the cost of replacing it, from
around $31,000 a month ($379,958 annually) to $41,000 ($531,250
annually) over the next 16-year cycle. 

The board approved a request for an increase in the billing rate for
ambulance service of 4.1%; 5% would require going to the county board of
supervisors. LaMont spoke of the recent acquisition of AMR by GMR. In
response to a question from Commissioner Henry Sawicki, LaMont explained
that since ambulance companies are being bought up by for-profit
businesses, and since ambulance service is a very expensive item in
medical billing, people might think it a lucrative business. Some calls
are expensive: Interfacility transport, ambulance rides between
hospitals and other facilities, are prepaid. Firms agree to take
money-losing 911 calls in order to get the interfacility calls, calls
outside IFPD’s service area. IFPD’s medical calls also are relatively
high mileage, with most going off the Hill.

But Medicare and MediCal reimburse less than $100 for a service billed
by IFPD at over $2,000. This means IFPD’s budget includes a red line for
ambulance service write off, money it will never see, usually about 60%.
For 2022-23, this was $897,750 out of the total billed, $1,522,000.
LaMont said this needs to be addressed at the federal level.

Another revenue item approved was the district’s unit fee, the
assessment that appears on property tax bills. It was set in 1981 at $65
for a structure up to 3,000 square feet, with higher fees for larger
buildings. The annual approval is a legal requirement, but any increase
would have to be approved by two-thirds of the voters in the district.
LaMont noted that the district has a sustainability committee that has
not met since COVID, and he is trying to restart that group, with the
board adding an ad hoc committee. He thinks it’s necessary, at some
point, to put an increase before the voters, including an accelerator, a
built-in increase to keep pace with inflation, using the Consumer Price
Index.

The Chief also met with U.S. Representative Ken Calvert, to discuss ways
his office could help IFPD. LaMont’s top two priorities were grants for
the district and funding for the U.S. Forest Service (USFS); although
IFPD is well staffed, LaMont said the San Jacinto Ranger District of the
San Bernardino National Forest was experiencing a 51% vacancy rate among
firefighters. Funding for USFS firefighters is another shortcoming
LaMont said requires federal attention.

LaMont told of one way Calvert did help IFPD recently after a visit from
the IRS. He recounted that several months ago, the agency decided IFPD
was a sole proprietorship, and owed a great deal in back taxes. During
months of engagement, the IRS would not back down from this position,
and only after the congressman’s intervention was the matter set
straight. LaMont was “bothered” by the thought of how a less savvy and
well-connected taxpayer would have dealt with the same situation. 

The board also received copies of the new VEC, which LaMont called “very
thorough” and “a wonderful thing.” He said he has been trying to put
this together for 20 years. It includes not just the vehicles and their
maintenance requirements, but all the supporting equipment on them, and
every tool (or tool kit) for which the district has paid more than $500.
With it, every necessary detail is available for the staff in a
permanent document.  The chief made a comment that began, “If I were to
get hit by a truck…,” making light of the importance of having an
institutional memory separate from any one person.

Two more staff members are in training for paramedic certification, to
finish in October. LaMont’s goal is to have all IFPD full-time personnel
certified. The Strategic Plan included statements from members of the
team, including Teeguarden, who recently completed paramedic
certification. She said she had thought she might never use the skills,
or only occasionally, but is actually running calls and driving an
ambulance. LaMont pointed out that IFPD does 12,050 calls a year, but
those calls do not come in evenly. Some days are very busy, and it helps
to have people who can cover different types of call.

LaMont mentioned helping teach a Strike Team/Task Force Leader class at
the Forest Service’s Danny Rhynes Training Center.  LaMont said the
facility had been “somewhat shuttered” for several years and that it was
nice to see it open again. One of the department’s volunteers also
completed a course: the Training the Trainers course for CERT (Community
Emergency Response Team) at Rancho Cucamonga Fire’s training center. 

Looking to future recruitment, IFPD team members conducted mock
interviews and gave students a crash course in resumé building at a job
fair at Anza’s Hamilton High. The chief noted that the line at IFPD’s
booth was among the longer ones and 18 future candidates went through
the exercise.

IFPD’s new communications site lacks only one piece of equipment, a
duplexer that will boost  transmission from 5 watts to 50, which will
help when working rescue missions in drainages and other dead spots.
IFPD also plans to relocate WNKI (1610 AM), the emergency radio station,
to the new site to provide better coverage.

In his update on fuels reduction projects, LaMont noted that wet winters
haver led to “amazing” regrowth in areas that were thinned six to eight
months ago. This is being trimmed on the new Bear Trap project, and “as
soon as we get a window, we plan on introducing a little bit of fire to
that landscape to try to reduce the threat on our west shoulder.” Home
abatement inspections begin April 15.

Before the open session, commissioners participated in the mandatory
bi-annual Workplace Ethics refresher with legal counsel. Secretary
Rhonda Andrewson, not present, was excused and so will complete that
requirement on her own, Commissioner Stephanie Yost said.

The next scheduled board meeting is 3 p.m. Tuesday, May 28.

On Sept. 27, 2023, the Wildland Fire Mitigation and Management
Commission (WFMMC) released its 340-page report. It included 148
recommendations to the Biden Administration as well Congress and state,
local and tribal governments.

On March 12, 2024, the U.S. Senate Committee on Energy and Natural
Resources held a hearing with members of the Administration and of the
committee.

Sen. Joe Manchin (D-WV), committee chair, opened the hearing and stated
its purpose was to hear about its “recommended policies to improve
federal forest and wildfire management.”

“Over the course of a year, [the commission] examined everything from
active forest management to contracts for firefighting aircraft and came
up with 148 unanimous recommendations,” Manchin said. “We’re going to
focus on recommendations targeted at the federal land management
agencies.”

Ironically, Manchin noted that the hearing was only two weeks after the
Smokehouse Creek Fire that burned more than a million acres in Texas,
the largest fire in the state.

Committee’s ranking member Sen. John Barrasso (R-WY) raised concerns
about the Happy Jack Fire that had burned 6,600 acres near Cheyenne,
Wyoming at the beginning of the month.

“This is a sobering reminder; the wildfire crisis won’t solve itself,”
he shared. “We can’t keep throwing money and research at the problem. We
need to get back to basics and start managing the forest in a serious
and credible way.”

Putting wildfire in perspective was Madelene McDonald, watershed
scientist for Denver Water, and also a member of the commission, who
shared. “It is not the presence of wildfire itself on the landscape that
is the core issue; it is often the impacts of wildfire when fire burns
with uncharacteristically high severity.”

One issue members noted was that many high-risk fire areas are
frequently populated with small-diameter, low-value trees, according to
Manchin. Consequently, they were hoping the witnesses would address the
options of invigorating the timber harvest industry to promote more
thinning.

“The wood processing industry, which broadly includes sawmills, pallet
mills, firewood producers, post and pole facilities, biomass power
facilities and other similar uses, can help to offset the cost of forest
management, and is a critical and necessary tool to accomplish forest
management goals and reduce our wildfire risk across our forested
landscapes,” said Cody Desautel, executive director for the Confederated
Tribes of the Colville Reservation in Washington state and a commission
member.

One witness directed attention to the tables and chairs around the
hearing room and noted that was an example of how thinning can create
benefits for many and protect the forests.

Sen. Martin Heinrich (D-NM) referenced a study that indicated that old
growth forests have greater capacity to capture and store carbon and
were more fire resistant.

Firefighter pay and benefits was the other major topic of the hearing.
All of the elected officials were strong advocates of ensuring
firefighters were paid appropriately for the work and the risk of that
work. While a temporary increase in pay was recently approved, but only
in effect until the end of the fiscal year, all were looking at the
Administration to offer a proposal with permanent changes in pay and
benefits.

As WFMMC member and currently Deputy Under Secretary for Natural
Resources and Environment at the U.S. Department of Agriculture, Meryl
Harrell also noted the continuing growth of wildfires.

“This is an urgent crisis. Our best science indicates that the
frequency, size, and severity of wildfires are projected to increase,
including in areas that have little to no history of wildfire. This is a
challenge that crosses the natural and the built environment, from rural
and urban communities to the lands that surround them.”

In 2023, the U.S. Forest Service treated a record 4.4 million acres,
including treating 1.95 million acres, a record with prescribed fire,
according to Harrell. Funding for these types of projects will continue
to increase, she said. Last June, the Forest Service released its
strategy for prescribed fires and last month, the strategy to increase
training for prescribed fire training also was released.

Joan Mooney, principal deputy assistant secretary for policy,
management, and budget at the U.S. Department of the Interior, stressed
the Administration’s intention to focus on using aviation equipment,
including drones, in future fire responses.

With respect to firefighters’ pay, Harrell emphasized that the
president’s 2025 budget includes proposals for significant compensation
reforms to increase the nation’s investments in the wildland fire
management workforce.

In addition to proposals that promote affordable housing and health and
well-being, other improvements included are a special base rate salary
table for wildland firefighters; a new premium pay category that
provides some additional compensation tied to incident response; and
authorization to grant paid rest and recuperation leave to employees
returning from certain multiday incidents related to wildland fires.

Not just compensation, but training is important, said McDonald. “We
must focus significant attention on expanding this workforce. Congress
has a vital role to play in supporting the expansion of this workforce
through funding to community colleges and vocational programs,
authorizing federal agencies to use hiring and recruitment incentives,
and through funding and support to job and conservation corps.”

The nonfederal witnesses emphasized that wildfires are not bound by
jurisdictional lines. Fire easily moves from federal lands to state,
tribal, local and even private.

“Indian people suffer most from the consequences of catastrophic
wildfire,” Desautel told the committee. “When fires burn, we breathe the
smoke. We suffer the loss of wildlife habitat. Our water quality is
impacted, our fisheries damaged. Fires from federal lands burn our own
lands, destroy our timber resources and impact sources of tribal revenue
for generations. The risk of wildfire to Indian lands is compounded by
the thousands of miles of shared boundary with federal agencies,
primarily the U.S. Forest Service and Bureau of Land Management.”

Consequently, more collaboration and cooperation will be needed in the
future. They underlined the need for funding of federal projects to
allow work to be accomplished on adjoining lands.

Hazardous fuel reduction project funds “… can make a difference in
getting the most crucial acres treated within our wildfire prone
landscapes by allowing cross boundary application.” said Kelly Norris of
the Wyoming State Forestry.

But she cautioned, “Solely focusing on wildfire suppression and ignoring
proactive forest management does not lead to fewer wildfires in the long
run; the fuel continues to build up and eventually wildfires become
unmanageable.”

Thursday, March 28, the California Public Utilities Commission (CPUC)
issued a proposed decision on how large, investor-owned utilities may
charge for electricity in California.

In the future, the utility bills will include two charges. One will be a
flat rate for the cost of the electric grid, for example, building and
maintaining the industry’s infrastructure, such as power lines. The
other charge will be for actual usage.

The hearing for this proposed decision is scheduled for the CPUC’s May 9
business meeting. If approved, the new rate structure will go into
effect in late 2025 and early 2026.

If approved, the CPUC estimates that a customer who powers their home
and vehicle with electricity would save an average of $28 to $44 monthly
compared to under today’s billing structure.

The Administrative Law Judge is proposing the statewide flat rate of
$24.15 for fixed costs. The Solar Energy Industries Association
recommended a flat rate of $9.72, the lowest of eight recommendations.
San Diego Gas and Electric suggested a flat rate of $73, the greatest
recommendation. Southern California Edison, and Pacific Gas and Electric
recommended a rate of $51.

Public electric utilities in California such as the Los Angeles
Department of Water and Power (LADWP) have flat rates in its billing
structure. At LADWP, the rate is $12. Riverside City Department of
Public Utilities has a flat rate of $36.09. Most other states use this
form of billing.

By separating the fixed costs from the usage charges, the expected
electric rate decline is 5 to 7 cents, according to the CPUC. This will
not change the utilities’ ability to impose time-of-day charges.

This change in the rate structure is the result of Assembly Bill 205,
which became law June 30, 2022. It gave the CPUC until July 1, 2024, to
develop a new rate structure.

The text of the bill, in section (3) of the introduction states, “… The
bill would eliminate the cap on the amount of the fixed charge that the
PUC may authorize. The bill would require the fixed charge to be
established on an income-graduated basis, as provided, with no fewer
than 3 income thresholds so that low-income ratepayers in each baseline
territory would realize a lower average monthly bill without making any
changes in usage …”

The new rate provisions still maintain both current income-based
discounts for electricity customers.

The California Alternative Rates for Energy (CARE) low-income assistance
program enrollees will have a $6 reduction applied to the flat rate on
their bills. Currently, CARE offers a 30 to 35% discount in rates based
on income and family size. For example, a family of four with an income
of less than $60,000 would qualify for some reduction. About 30% of the
customers of large independently owned utilities qualify for these
reductions.

Also, customers who are part of the Family Electricity Rate Assistance
(FERA) program will receive a $12 reduction for their flat rate.
Families in this program live in deed-restricted, affordable housing
with incomes at or below 80% of the area median income.

In January , during the period when comments could be submitted to the
CPUC, 10 state senators strongly urged the CPUC “… to adopt a fixed
charge that does not drastically impact customers, including those who
are already struggling to pay for their rising electricity bills.”

At the time, they were very concerned about the proposed flat rates of
$51 or $73 recommended by the largest publicly owned state utilities.

The CPUC stressed that the proposed decision does not include any income
verification requirements. The existing programs like CARE and FERA
already establish income eligibility through enrollment in programs like
MediCal and SNAP or through a voluntary income self-attestation process
followed by audits, according to the press release.

The proposed decision applies to all residential customers, including
those with rooftop solar. They also will transition to flat rates and
usage rates. Rooftop solar customers consistently rely on grid
infrastructure to use electricity from the grid and to send electricity
back to the grid.

And the CPUC said, this is not a hidden, profit-making scheme for the
utilities. There are no new fees. The proposal redistributes costs
associated with running the electrical grid and is not a profit
increase.

“This proposal brings California in line with state and national
trends,” the CPUC opined.

The March 30 meeting of the Idyllwild Water District (IWD) Board of
Directors included the swearing in of Mitch Davis to the fill a seat
that has been vacant for the last year.

This also was the first meeting at which interim General Manager (GM)
Curt Sauer was able to give a report of his management style in action.
Sauer began his service the first week of Feb. , after the board voted
to terminate then-GM Leo Havener, first putting him on one month’s
administrative leave.

The longest public comment came from John Jacobs, longterm resident and
IWD ratepayer. Jacobs expressed appreciation for the difficult decisions
the board has made recently including the “need for a change in
leadership and management” and the “the reinstatement of a couple of key
employees that had honorable histories here and deserved more
opportunity.” This was the first public reference to the return of Tyla
Wheeler to the office and Brian Wilson to the field. Fired by the last
GM, Sauer put both on administrative leave as he began to sort through
the district’s personnel issues. Later, President Charles Schelly
confirmed that the former GM’s chief water operator has been placed on
administrative leave.

Sauer began his operations report with a recap of the all-employee
team-building meetings he had called. He said he had asked staff two
questions: “What do you need to be better at what you do?” and “What do
you need to turn the district into something you could be proud of?” The
top three answers to the first were: Office staff need to go into the
field to see operations, better communications and radio communications,
and improved record keeping and documentation. The top answers to the
second question were: customer relations, cost savings, and improving
communications between field and office.

In a sign that these exercises are leading to action, Sauer noted that
“office staff is shadowing field staff to gain a better understanding in
the field.” This will take up to four hours once a month. Sauer
underlined that the office staff is the face of the organization, and he
hears calls from ratepayers with concerns. “We can do a better job
training [office staff about operations] so they can relay that to the
public.”

Sauer noted that work had finally begun on the lower office, with the
foundation in progress and heating and AC being installed that day. The
parking area will be repaved and the district’s field crew has
voluntarily cleaned up the property in preparation for landscape
improvements. 

Planning for the largest undertaking, replacing the aging Waste Water
Treatment Plant (WWTP), is going slowly. The firm in charge of the
initial plans is still three months away from finishing 30% of the
engineering, a benchmark that allows the application process for grants
and loans to begin. Sauer noted three things that have held this up: the
geotechnical report, “which we have received;” the 30-day period for
California Environmental Quality Act (CEQA) tribal consultation, ending
April 13; and another 30-day comment period for the entire CEQA, which
will be “about the end of May.”

Although most of IWD’s meters were recently replaced, there were still a
few old units in service, all in especially difficult situations. Four
of these tricky replacements have been completed, and now only seven
remain. About 15 of the new meters each month do not read remotely; “We
are looking into changing out their MXUs, the signal producing box on
top of the meters.” This will save time staff spends manually reading
these. Sauer’s “housecleaning” includes some literal housecleaning: the
maintenance shop has been inventoried and staff has identified “surplus
property,” also know as “piles of junk, that will be removed by the end
of the summer.”

Sauer also addressed one of the issues which had caused friction between
IWD and Idyllwild Fire Protection District (IFPD). His operations report
includes a note that it was based on data from Feb. 2024, and two items
that are part of “non water sales” (water that was lost or used
internally and not sold) were “based on data submitted by employees no
longer collecting that data, and I will be revisiting those.”

These items were WWTP back wash, 10,000 gallons and fire department
usage per IFPD, 100,000 gallons. This last was the bone of contention.
The previous GM was claiming a uniform monthly 100,000 gallons in
nonmetered water IFPD used, but IFPD had stopped using IWD hydrants for
training activities and had worked out a plan with Fern Valley Water,
collecting hydrant flushing water and reusing it. This, it follows,
would have skewed all of the former GM’s monthly loss figures.

One item was removed from the consent calendar, the approval of minutes
from the last several months. Director Stephen Olson noticed errors in
the submitted corrected versions and asked that these be repaired.

Schelly also noted that the interim GM’s contract was included in the
board packet. Public employees have public contracts. Sauer is being
paid $144,000 annually, with few perks, one being the use of a district
vehicle for commuting, or reimbursement for mileage. Sauer’s pay is less
than that of the former GM, whose pay was $168,000, with perks bringing
it up to $180,000, according to publicpay.ca.gov.

Sauer has hired colleagues on a part-time basis to assist while the
chief water operator is on leave: Randy Little from Joshua Basin Water
District and Bill Rojas from Oceanside. Each comes one day a week.
Little’s 33 years of water experience includes expertise with the SCADA
data acquisition systems the district depends on. Rojas has been coming
up Fridays for training.

Thursday and Friday, 11 applicants from a field of 24 were to be
interviewed for the operator in training position open with the
departure of a commuting employee who found a job a few minutes from his
home. In other employee news, office manager Kayla Stevens has begun
billing system training, and Wilson has received his certification for
grades D2 and T2. 

After the public session the board went into closed session to discuss
exposure to litigation. No action was reported from that session. The
next regular session is 6 p.m. Wednesday, April 17.